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Making Capitalism Work: Social Capital and Economic Growth in Italy, 1970-1995

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  • Thomas P. Lyon

    (Indiana University)

Abstract

Using data on the 20 Italian regions for the period 1970-1995, I examine whether the presence of social capital, as reflected in a number of different measures collected by Putnam (1993), affects economic productivity. I find three types of effects. First, social capital, when treated as an input to regional production, has a positive and significant effect in the South, but a much weaker effect in the North. Second, some forms of social capital can significantly increase regions’ propensities to make physical capital investments; however, dense networks of association reduce capital investment in both the North and South. Instrumental variables estimates show that social capital affects growth both directly and through affecting investment in physical capital. Third, social capital contributes positively to the rate of total factor productivity growth in the Italian regions.

Suggested Citation

  • Thomas P. Lyon, 2005. "Making Capitalism Work: Social Capital and Economic Growth in Italy, 1970-1995," Working Papers 2005.70, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2005.70
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    Cited by:

    1. Ernest Miguelez & Rosina Moreno & Manuel Artis, 2011. "Does Social Capital Reinforce Technological Inputs in the Creation of Knowledge? Evidence from the Spanish Regions," Regional Studies, Taylor & Francis Journals, vol. 45(8), pages 1019-1038.
    2. Emanuele Felice, 2013. "Regional income inequality in Italy in the long run (1871–2001). Patterns and determinants," UHE Working papers 2013_08, Universitat Autònoma de Barcelona, Departament d'Economia i Història Econòmica, Unitat d'Història Econòmica.
    3. Neira, I. & Portela, M. & Vieira, E., 2010. "Social Capital and growth in European regions," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 10(2).
    4. Felice, Emanuele, 2009. "Regional value added in Italy (1891-2001) : estimates, elaborations," IFCS - Working Papers in Economic History.WH wp09-08, Universidad Carlos III de Madrid. Instituto Figuerola.
    5. Urszula Markowska-Przybyła, 2020. "Does Social Capital Matter for Total Factor Productivity? Exploratory Evidence from Poland," Sustainability, MDPI, vol. 12(23), pages 1-25, November.
    6. Xindong Xue & W. Robert Reed & Robbie C.M. van Aert, 2022. "Social Capital and Economic Growth: A Meta-Analysis," Working Papers in Economics 22/20, University of Canterbury, Department of Economics and Finance.
    7. Esposti, Roberto, 2014. "On why and how agriculture declines," Structural Change and Economic Dynamics, Elsevier, vol. 31(C), pages 73-88.
    8. Calcagnini, Giorgio & Perugini, Francesco, 2019. "Social capital and well-being in the Italian provinces," Socio-Economic Planning Sciences, Elsevier, vol. 68(C).
    9. Syed Sibghatullah Shah & Abdul Jalil & Syed Akhter Hussain Shah, 2020. "Growth Effects of Religion Dependent Social Capital: An Empirical Evidence," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(2), pages 423-443, June.

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    More about this item

    Keywords

    Social capital; Growth; Investment; Italy;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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